Thursday, July 30, 2009

What do gallbladder surgery (cholecystectomy) and lobster have in common?

According to Bob Wachter, quite a bit. Especially if you are trying to understand why health insurance costs so much.

Nothing in any of the proposals for health care reform do anything to really lower the cost of health care. There is a lot of shifting around of dollars.

Shifting to the consumer, shifting to the states.

But if you really want to make health insurance affordable you need to address what is really driving up the cost of health care.

Like lobster lunches . . .

You’ve just moved to a new town and stroll into a restaurant on the main drag for lunch. None of the large tables are empty, so you sit down at a table nearly filled with other customers. The menu is nice and varied. The waiter approaches you and asks for your order. You’re not that hungry, so you ask for a Caesar salad. You catch the waiter looking at you sideways, but you don’t think too much of it. He moves on to take the order of the person sitting to your right.

“And what can I get for you today, sir?”

“Oh, the lobster sounds great. I’ll have that.”

You’re taken aback, since the restaurant doesn’t seem very fancy, and your tablemate is dressed rather shabbily. The waiter proceeds to the next customer.

“And you, ma’am?”

“The lobster sounds good,” she says. “And I'll take a small filet mignon on the side.”

Now you’re completely befuddled. You tap your neighbor on the shoulder and ask him what’s going on.

“Oh, I guess nobody told you,” he whispers. “This is a lunch club. We add up the bill at the end of the meal, and divide it by the number of people at the table. That’s how your portion is determined.”

You frantically call back the waiter and change your order to the lobster.

“If the waiter makes a 15% tip on the total bill and you ask him to recommend a dish,” Enthoven asked our health econ class, a glint in his eye, “do you think he’ll recommend the salad or the lobster?”

“And if most of the lunch business in town is in the form of these lunch clubs, do you think you’ll find more restaurants specializing in lobster or in salad?”

If you want to know what this has to do with gallbladder surgery you will need to read Bob's article (linked above) to get the rest of the story.

What do gallbladder surgery (cholecystectomy) and lobster have in common?

According to Bob Wachter, quite a bit. Especially if you are trying to understand why health insurance costs so much.

Nothing in any of the proposals for health care reform do anything to really lower the cost of health care. There is a lot of shifting around of dollars.

Shifting to the consumer, shifting to the states.

But if you really want to make health insurance affordable you need to address what is really driving up the cost of health care.

Like lobster lunches . . .

You’ve just moved to a new town and stroll into a restaurant on the main drag for lunch. None of the large tables are empty, so you sit down at a table nearly filled with other customers. The menu is nice and varied. The waiter approaches you and asks for your order. You’re not that hungry, so you ask for a Caesar salad. You catch the waiter looking at you sideways, but you don’t think too much of it. He moves on to take the order of the person sitting to your right.

“And what can I get for you today, sir?”

“Oh, the lobster sounds great. I’ll have that.”

You’re taken aback, since the restaurant doesn’t seem very fancy, and your tablemate is dressed rather shabbily. The waiter proceeds to the next customer.

“And you, ma’am?”

“The lobster sounds good,” she says. “And I'll take a small filet mignon on the side.”

Now you’re completely befuddled. You tap your neighbor on the shoulder and ask him what’s going on.

“Oh, I guess nobody told you,” he whispers. “This is a lunch club. We add up the bill at the end of the meal, and divide it by the number of people at the table. That’s how your portion is determined.”

You frantically call back the waiter and change your order to the lobster.

“If the waiter makes a 15% tip on the total bill and you ask him to recommend a dish,” Enthoven asked our health econ class, a glint in his eye, “do you think he’ll recommend the salad or the lobster?”

“And if most of the lunch business in town is in the form of these lunch clubs, do you think you’ll find more restaurants specializing in lobster or in salad?”

If you want to know what this has to do with gallbladder surgery you will need to read Bob's article (linked above) to get the rest of the story.